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Low-Income Seniors to Receive W100,000 in Pension Benefits
By Lee Jin-woo, The Korean Times
Korea
May 8, 2005
According to the plan of the Ministry of Health and Welfare, which is expected to be implemented by 2008 on a step-by-step basis, almost all low-income seniors will benefit from the expanded welfare program.
As the first step, the government will improve the current senior pension program by giving an annuity of 50,000 won ($50) to all current elderly beneficiaries of the pension in 2006. Those seniors have been divided into different annuity brackets ranging from 35,000 won to 50,000 won.
In 2007 as the second step, the qualifications of the pension beneficiaries will be lowered to those who earn less than 80 percent of the average income of an adult living in an urban area from the current 65 percent. The amount of annuity will also increase to 70,000 won per month.
In the final step, the amount will go up further to 100,000 won by 2008, and all seniors who earn less than 100 percent of an average urban worker's income will benefit from the senior pension.
In order to meet the increasing financial burden, the government will increase its related budget from the current 311 billion won to 513 billion won next year and to 832 billion won in 2007. The budget will be increased to 1.39 trillion won by 2008.
The number of senior subscribers will significantly increase from 630,000 to over 1.16 million people by 2008. The amount of monthly annuity will also go up at least two times higher from the current range between 35,000 won and 50,000 won to 100,000 won. If both a husband and a wife receive the senior pension, one person of the couple will get a decreased amount of money from the government.
Currently seniors born before July 1933 who belong to the lowest income bracket receive 45,000 won to 50,000 won. Others belonging to a higher income bracket with the total wealth per family of 50 million won or less in a rural area, 54 million won or less in a small- or medium-sized urban area, or 66 million won or less in metropolitan cities, will receive 35,000 won.
Considering the number of seniors aged 65 years or older stood at 4.18 million at the end of last year, at least one-third of seniors will benefit from the pension with the new plan.
Among them, only 1.59 million people, or 38 percent, including 632,000 people who currently receive senior pension and 955,000 people who benefit from other types of pensions such as those for retired civil servants and retired military personnel, have been financially supported by the nation.
The amount of 100,000 won has been tuned in consideration of 220,000 won, which has been set as the lowest annuity offered by the current program available by the National Pension Fund.
President Roh Moo-hyun's administration has been criticized for not having been able to offer any eye-catching welfare programs for people in need despite the strong support it received from low-income voters during the 2002 presidential election.
Although the main-opposition Grand National Party has called for a more generous pension program for all seniors over 65 years old, it is feared such program will cost over 10 trillion won out of the national treasury.
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